Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Easy Solutions limited manufactures electronic calculators. One of its top-selling calculators has a price of
$50. Recently, a competitor entered the market and started offering a similar calculator at a price that is
20% below the $50 price of Easy Solutions. Company policy requires Easy Solutions to have a profit margin
equal to 30% on sales of each of its products.
1.What target cost would have to be set for the Easy Solutions calculator to remain competitive and still meet the target profit margin of the company?
2.
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